Bernanke Talks Markets to New Highs – But What’s Next?

News that the Fed is keepin' it loose prompted a big move in the markets

Federal Reserve Chairman Ben Bernanke said Wednesday that central bank policy in the U.S. will stay loose “for the foreseeable future” amid low inflation and high unemployment.

It was off to the races for stocks as a result, with the major indexes pushing to new highs.

Bernanke spoke in Cambridge, Mass., to the National Bureau of Economic Research. But it’s not the first speech of his that investors and market pundits have parsed closely for insights into talk about “tapering” of Fed policy in the coming months.

Bernanke caused waves when he said the Fed likely will reduce its stimulus later this year and end it by mid-2014, with investors worried that the central bank is taking its foot off the gas too soon in regards to its $85 billion monthly bond buying program known as “quantitative easing.”

So is this really news? Charles Sizemore and I don’t think it really is.

At a Glance

It's kind of not news that rates would stay low and stimulus in place though, isn't it? I mean we remain way below our 2% inflation ceiling and way above the 6.5% unemployment threshold that would prompt a change of course...